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Vornado(VNO) - 2025 Q2 - Earnings Call Transcript
2025-08-05 15:02
Financial Data and Key Metrics Changes - Comparable FFO for Q2 2025 was $0.56 per share, beating analyst consensus of $0.53 per share and remaining flat compared to Q2 2024 [27] - New York office occupancy increased to 86.7% from 84.4% in the previous quarter [28] - Net debt to EBITDA improved by 1.4 turns to 7.2 times from 8.6 times [24] Business Line Data and Key Metrics Changes - In Q2 2025, the company leased 2,700,000 square feet overall, with 2,200,000 square feet in Manhattan office space [12] - Average starting rents for Manhattan office leasing were $101 per square foot, with mark-to-markets of +11.8% GAAP and +8.7% cash [13] - PENN1 occupancy reached 90% after leasing 183,000 square feet at an average starting rent of $101 per square foot [13] Market Data and Key Metrics Changes - The Manhattan office market is described as a landlord's market with tight availability and no new supply expected through the end of the decade [11] - Replacement costs for Class A towers in Manhattan have risen to approximately $2,500 per square foot, with rents in the $200s now commonplace [10] - The overall demand for office space in Manhattan is strong, with significant expansion from clients [10] Company Strategy and Development Direction - The company remains focused on its New York-centric strategy, with plans to enhance the PENN District through various development projects [20] - Future developments include a residential project and modern retail offerings along Seventh Avenue [20][21] - The company aims to capitalize on rising rents and limited supply in the Manhattan market [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong leasing activity and a robust pipeline [28] - The company anticipates significant earnings growth by 2027 as leases at PENN1 and PENN2 come online [28] - Management highlighted the importance of disciplined capital allocation and the potential for significant rental growth in the coming years [82] Other Important Information - The company completed several financing transactions to bolster liquidity, including a $450 million financing with 1535 Broadway [23] - Cash balances increased to $1.36 billion, with total immediate liquidity of $2.9 billion [24] - The company is actively managing its debt maturities and refinancing opportunities [29] Q&A Session Summary Question: How much of the pending leasing activity is geared towards PENN2? - Approximately 50% of the 560,000 square feet in the leasing pipeline is at PENN2 [32] Question: Is the company looking to sell its assets in San Francisco? - The company is open to selling assets like The Mart and 555 California if the right price and timing arise, but there are no immediate plans [35] Question: What is the physical occupancy and rent coming online over the next year? - The company expects occupancy to increase to the low 90s over the next year, with significant income ramping up in 2027 [38] Question: What are the expectations for same-store NOI in the coming years? - Positive same-store NOI is expected as leasing activity increases, but specific percentages cannot be provided at this time [92] Question: What are the plans for the Forever 21 retail space? - The timing for backfilling the Forever 21 space is uncertain, but the company is optimistic about the retail corridor's potential [73]
Vornado(VNO) - 2025 Q2 - Earnings Call Transcript
2025-08-05 15:00
Financial Data and Key Metrics Changes - The second quarter comparable FFO was $0.56 per share, beating analyst consensus of $0.53 per share and remaining flat compared to the previous year's second quarter [26] - New York office occupancy increased to 86.7% from 84.4% in the previous quarter, primarily due to a full building master lease at 770 Broadway [27] - The net debt to EBITDA metric improved by 1.4 turns to 7.2 times from 8.6 times, indicating a stronger balance sheet [23] Business Line Data and Key Metrics Changes - In the first half of 2025, the company leased 2,700,000 square feet overall, with 2,200,000 square feet in Manhattan office space [10] - The average starting rents for Manhattan office leasing were $97 per square foot, with mark-to-markets of plus 10.7% GAAP and plus 7.7% cash [10] - The company executed 27 deals totaling 1,500,000 square feet in Manhattan during the second quarter, with average starting rents of $101 per square foot [11] Market Data and Key Metrics Changes - The company operates primarily in Manhattan, which is considered the strongest real estate market in the country, with a focus on a smaller Class A better building market of 180,000,000 square feet [7][8] - Replacement costs for a Class A tower in Manhattan have risen to approximately $2,500 per square foot, with rents in the $200s now commonplace [8] - The leasing pipeline includes 560,000 square feet of leases signed or in negotiations, with over 1,000,000 square feet in various stages [21] Company Strategy and Development Direction - The company aims to focus on increasing its stock price and is considering selling non-core assets in Chicago and San Francisco for the right price [32] - The Penn District is viewed as a growth engine for the company, with plans for future development projects and rising rents [19] - The company is actively redeveloping 350 Park Avenue with Citadel as the anchor tenant, indicating a commitment to high-quality developments [24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong demand and a landlord's market in Manhattan due to tight availability and no new supply expected through the end of the decade [9] - The company anticipates significant earnings growth by 2027 as leases at PENN1 and PENN2 come online [27] - Management noted that the financing markets are liquid, and they are actively refinancing their 2025 maturities, indicating confidence in future cash flows [28] Other Important Information - The company has generated $1,500,000,000 of net proceeds from sales, financings, and the NYU deal since the beginning of the year [23] - The company has completed several refinancing transactions, including a $675,000,000 refinancing of Independence Plaza and a $450,000,000 refinancing of PEN11 [22] Q&A Session Summary Question: How much of the pending leasing activity is geared towards PENN2 versus the rest of the portfolio? - Approximately 50% of the 1,400,000 square feet in the pipeline is at PENN2 [31] Question: Can you elaborate on the potential sale of The MART and 555 California? - The company views these assets as valuable and will sell them for the right price, but they are not actively marketing them [33] Question: What is the current physical occupancy and rent coming online in the next twelve months? - The company expects occupancy to increase to the low 90s over the next year, with significant income growth anticipated in 2027 [38] Question: How do you see the potential for NOI growth in the Penn District? - The company believes that as market rents increase, the existing inventory could generate significant NOI growth, potentially reaching $400,000,000 in five years [42] Question: What are the thoughts on dividend reinstatement? - The company expects to at least match last year's dividend of 74¢ per share and is considering a more regular dividend as the business environment improves [88]
Vornado (VNO) Reports Q2 Earnings: What Key Metrics Have to Say
ZACKS· 2025-08-04 23:32
Core Insights - Vornado reported $441.44 million in revenue for the quarter ended June 2025, reflecting a year-over-year decline of 2% and a surprise of -3.06% compared to the Zacks Consensus Estimate of $455.38 million [1] - The EPS for the same period was $0.56, which is an increase from $0.18 a year ago, resulting in an EPS surprise of +5.66% against the consensus estimate of $0.53 [1] Financial Performance Metrics - Total Property Square Feet in New York was reported at 20,857.00 Ksq ft, slightly below the average estimate of 20,893.00 Ksq ft [4] - Occupancy rates in New York were 85.2%, exceeding the average estimate of 84.3% [4] - New York Retail occupancy was reported at 67.7%, lower than the average estimate of 72.1% [4] - New York Office occupancy was 86.7%, in line with the average estimate of 86.6% [4] - Total revenues from Other sources were $83.27 million, surpassing the average estimate of $79.58 million, marking a year-over-year increase of +0.7% [4] - Total revenues from New York were $358.17 million, below the average estimate of $376.94 million, representing a -2.6% change year-over-year [4] - Management and Leasing Fees generated $2.93 million, significantly lower than the average estimate of $3.74 million, indicating a -56.4% year-over-year decline [4] - Total revenues from Fee and Other Income were $59.19 million, exceeding the average estimate of $54.81 million, reflecting a +4.4% year-over-year change [4] - BMS Cleaning Fees totaled $37.43 million, slightly above the average estimate of $37.11 million, showing a -2.7% change year-over-year [4] - Other income from Fee and Other Income was $18.83 million, surpassing the average estimate of $15.06 million, with a year-over-year increase of +63.8% [4] - Total rental revenues were reported at $382.25 million, below the average estimate of $400.52 million, indicating a -2.9% change year-over-year [4] - Property rentals generated $332.18 million, lower than the average estimate of $351.66 million, reflecting a -3.4% year-over-year change [4]
Vornado(VNO) - 2025 Q2 - Quarterly Results
2025-08-04 20:37
[Business Developments](index=3&type=section&id=BUSINESS%20DEVELOPMENTS) The company engaged in significant transactions, including a major lease with NYU and several property dispositions, while actively managing its debt through repayments and refinancings [Major Transactions & Dispositions](index=3&type=section&id=Major%20Transactions%20%26%20Dispositions) The company executed several significant transactions, including a 70-year master lease with NYU for 770 Broadway generating $935 million in prepaid rent, which was used to repay a $700 million mortgage. An arbitration panel set the annual ground rent for PENN 1 at $15 million, a decision the ground lessor is challenging. Vornado also completed multiple dispositions, including the sale of its JV interest in a portion of 666 Fifth Avenue to UNIQLO for $350 million and the sale of condominium units at 220 Central Park South and Canal Street - Completed a 70-year master lease with New York University (NYU) for 1,076,000 sq. ft. at 770 Broadway, with NYU making a prepaid lease payment of **$935 million**, a portion of which was used to repay the property's **$700 million** mortgage, resulting in a gain on sales-type lease of **$803.2 million**[5](index=5&type=chunk)[6](index=6&type=chunk) - An arbitration panel determined the annual ground rent for the PENN 1 land parcel to be **$15 million** for the 25-year period starting June 17, 2023, leading to a reversal of **$17.2 million** in previously accrued rent expense, though the ground lessor is currently challenging this determination in court[7](index=7&type=chunk)[8](index=8&type=chunk)[9](index=9&type=chunk) Summary of Key Dispositions (Six Months Ended June 30, 2025) | Property | Transaction Detail | Net Proceeds / Value | Financial Statement Gain | | :--- | :--- | :--- | :--- | | **666 Fifth Avenue (JV)** | Sale of UNIQLO flagship store portion | $342.0M | $76.2M | | **220 Central Park South** | Sale of two condominium units | $24.8M | $13.7M | | **Canal Street Condos** | Sale of six residential units | $21.6M | $10.3M | | **512 West 22nd Street (JV)** | Agreement to sell office building | $205.0M (Gross) | ~$11.0M (Expected) | | **49 West 57th Street (JV)** | Sale of commercial condominium | $8.7M | $2.5M | [Financing Activity](index=4&type=section&id=Financing%20Activity) The company actively managed its debt profile by repaying $450 million of senior unsecured notes. Key refinancing activities included a $450 million loan for 1535 Broadway, a $675 million refinancing for Independence Plaza at a higher interest rate, and a $450 million refinancing for PENN 11. Additionally, Vornado achieved a sustainability-linked interest rate reduction on its credit facilities - Repaid **$450 million** of 3.50% senior unsecured notes on their January 15, 2025 maturity date[16](index=16&type=chunk) Key Financing Activities | Property | Amount | Interest Rate | Maturity | | :--- | :--- | :--- | :--- | | **1535 Broadway (JV)** | $450M | 6.90% (Fixed) | May 2030 | | **Independence Plaza (JV)** | $675M | 5.84% (Fixed) | June 2030 | | **PENN 11** | $450M | 6.35% (Fixed) | August 2030 | - Qualified for a sustainability margin adjustment, reducing interest rates by **0.05%** on its unsecured term loan and **0.04%** on its revolving credit facilities[18](index=18&type=chunk) [Financial Information](index=5&type=section&id=FINANCIAL%20INFORMATION) The company reported a significant increase in Q2 2025 net income driven by a major lease transaction, while FFO and NOI metrics showed mixed performance, and the balance sheet reflected reduced liabilities and increased liquidity [Financial Highlights](index=5&type=section&id=Financial%20Highlights) For Q2 2025, Vornado reported a significant increase in net income attributable to common shareholders to $743.8 million, or $3.70 per diluted share, primarily driven by a major asset transaction. Adjusted FFO per diluted share was $0.56, a slight decrease from $0.57 in Q2 2024. The company's total liquidity stood at $2.92 billion at the end of the quarter Q2 2025 Key Financial Metrics vs. Q2 2024 | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net income attr. to common shareholders | $743.8M | $35.3M | | Per diluted share | $3.70 | $0.18 | | FFO per diluted share, as adjusted (non-GAAP) | $0.56 | $0.57 | | Total Liquidity | $2,923M | $2,677M | - The company anticipates continuing its recent policy of paying one common share dividend in the fourth quarter of 2025, subject to Board approval[22](index=22&type=chunk) [FFO, As Adjusted Bridge](index=6&type=section&id=FFO%2C%20As%20Adjusted%20Bridge) Adjusted FFO per share for Q2 2025 was $0.56, a slight decrease from $0.57 in Q2 2024. The year-over-year change was influenced by several factors, with a positive impact from changes in the tax assessed value of THE MART ($9.2M) being offset by lower interest income (-$5.8M), asset sales (-$3.3M), and other net items (-$3.9M) FFO, As Adjusted Bridge - Q2 2025 vs. Q2 2024 (in millions) | Description | Amount | | :--- | :--- | | **FFO, as adjusted - Q2 2024** | **$112.8** | | Changes in THE MART tax value | $9.2 | | Interest income | ($5.8) | | Asset sales | ($3.3) | | Variable businesses (signage) | $2.4 | | Other, net | ($2.0) | | **FFO, as adjusted - Q2 2025** | **$113.3** | [Net Operating Income, EBITDAre, FFO and FAD](index=7&type=section&id=Net%20Operating%20Income%2C%20EBITDAre%2C%20FFO%20and%20FAD) In Q2 2025, NOI at share was $277.7 million, slightly down from $280.2 million in Q2 2024. On a cash basis, NOI at share saw a more significant decrease to $231.7 million from $279.6 million year-over-year. FFO attributable to common shareholders was $120.9 million, compared to $148.9 million in the prior-year quarter. Funds Available for Distribution (FAD) was negative $6.6 million, a sharp decline from $87.8 million in Q2 2024, primarily due to the timing of payments for tenant improvements and leasing commissions Key Performance Metrics (Q2 2025 vs Q2 2024) | Metric (in thousands) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **NOI at share** | $277,673 | $280,171 | | **NOI at share - cash basis** | $231,719 | $279,590 | | **EBITDAre, as adjusted** | $257,583 | $265,832 | | **FFO attributable to common shareholders** | $120,928 | $148,944 | | **FAD** | ($6,631) | $87,783 | - The significant increase in recurring tenant improvements and leasing commissions to **$104.2 million** in Q2 2025 from **$53.9 million** in Q2 2024 was a primary driver of the decline in FAD[27](index=27&type=chunk)[28](index=28&type=chunk) [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, Vornado's total assets stood at $15.61 billion, a decrease from $16.00 billion at year-end 2024. The decline was mainly driven by a reduction in investments in partially owned entities. Total liabilities decreased significantly to $8.59 billion from $9.83 billion, primarily due to reductions in mortgages payable and senior unsecured notes. Cash and cash equivalents increased to $1.20 billion from $734 million Consolidated Balance Sheet Summary (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$15,608,496** | **$15,998,608** | | Cash and cash equivalents | $1,204,863 | $733,947 | | Investments in partially owned entities | $2,003,206 | $2,691,478 | | **Total Liabilities** | **$8,594,438** | **$9,826,739** | | Mortgages payable, net | $4,977,526 | $5,676,014 | | Senior unsecured notes, net | $746,588 | $1,195,914 | | **Shareholders' Equity** | **$6,092,098** | **$5,158,242** | [Net Income Attributable to Common Shareholders (Consolidated and by Segment)](index=9&type=section&id=Net%20Income%20Attributable%20to%20Common%20Shareholders%20%28Consolidated%20and%20by%20Segment%29) For Q2 2025, net income attributable to common shareholders was $743.8 million, a substantial increase from $35.3 million in Q2 2024. This was primarily due to an $803.2 million gain on a sales-type lease. For the six months ended June 30, 2025, net income was $830.7 million compared to $26.2 million in the prior year period. The New York segment was the main driver of income, reporting $860.7 million attributable to Vornado Realty L.P. in Q2 2025, while the Other segment posted a loss - A gain on a sales-type lease of **$803.2 million** in Q2 2025 was the primary driver for the significant increase in net income compared to the prior year[31](index=31&type=chunk) Net Income Attributable to Common Shareholders (in thousands) | Period | 2025 | 2024 | | :--- | :--- | :--- | | **Three Months Ended June 30** | $743,819 | $35,260 | | **Six Months Ended June 30** | $830,661 | $26,226 | - By segment, for the six months ended June 30, 2025, the New York segment generated net income of **$1,004.7 million** attributable to Vornado Realty L.P., while the Other segment incurred a net loss of **$70.2 million**[35](index=35&type=chunk) [Net Operating Income at Share and Net Operating Income at Share - Cash Basis by Segment and Subsegment](index=12&type=section&id=Net%20Operating%20Income%20at%20Share%20and%20Net%20Operating%20Income%20at%20Share%20-%20Cash%20Basis%20by%20Segment%20and%20Subsegment) In Q2 2025, total NOI at share was $277.7 million, with the New York segment contributing $230.6 million. On a cash basis, total NOI at share was $231.7 million, with New York contributing $182.6 million. The Other segment's NOI was significantly boosted by a property tax reassessment at THE MART, which increased its NOI to $25.2 million from $16.1 million in Q2 2024 NOI at Share by Segment - Q2 2025 (in thousands) | Segment | NOI at Share | NOI at Share - Cash Basis | | :--- | :--- | :--- | | **New York** | $230,579 | $182,605 | | Office | $173,104 | $127,579 | | Retail | $42,798 | $39,692 | | **Other** | $47,094 | $49,114 | | THE MART | $25,197 | $25,258 | | 555 California Street | $18,686 | $20,684 | | **Total** | **$277,673** | **$231,719** | - The 2025 results for THE MART include a positive impact from the reversal of a prior period tax accrual due to a property tax reassessment[38](index=38&type=chunk) - The New York Office cash basis NOI includes the impact of a **$22.4 million** payment for prior period PENN 1 ground rent following a recent rent reset determination[38](index=38&type=chunk) [Same Store NOI at Share and Same Store NOI at Share - Cash Basis](index=13&type=section&id=Same%20Store%20NOI%20at%20Share%20and%20Same%20Store%20NOI%20at%20Share%20-%20Cash%20Basis) For Q2 2025 compared to Q2 2024, total same-store NOI at share increased by 5.4%, driven by a strong 57.7% increase at THE MART due to a tax reassessment. However, on a cash basis, total same-store NOI decreased by 4.8%, with the New York portfolio declining by 8.5%. This cash basis decrease was primarily attributed to the PENN 1 ground rent increase and GAAP rent commencing on new leases that are still in free rent periods Same Store NOI Growth % (Q2 2025 vs Q2 2024) | Portfolio | Same Store NOI at Share | Same Store NOI at Share - Cash Basis | | :--- | :--- | :--- | | **Total** | 5.4% | (4.8)% | | **New York** | 1.8% | (8.5)% | | **THE MART** | 57.7% | 50.6% | | **555 California Street** | 3.1% | (12.7)% | - The strong same-store NOI growth at THE MART was driven by the reversal of a prior period tax accrual from a property tax reassessment[41](index=41&type=chunk) - The decrease in New York's same-store cash NOI was primarily due to the current period PENN 1 ground rent increase and GAAP rent commencing on new leases with free rent periods[42](index=42&type=chunk) [Leasing Activity and Lease Expirations](index=14&type=section&id=LEASING%20ACTIVITY%20AND%20LEASE%20EXPIRATIONS) The company executed significant leasing activity in its New York portfolio with positive rent growth, while managing a staggered lease expiration schedule with notable maturities in 2027 and 2028 [Leasing Activity](index=14&type=section&id=Leasing%20Activity) During the six months ended June 30, 2025, the company leased 2.2 million square feet in its New York Office portfolio, achieving a 10.7% increase in GAAP basis rent and a 7.7% increase on a cash basis for second-generation space. In Q2 2025 alone, 1.5 million square feet of New York office space was leased, with an 11.8% GAAP rent increase. The leasing statistics exclude the significant 1.1 million square foot master lease to NYU Leasing Activity - Six Months Ended June 30, 2025 | Segment | Sq. Ft. Leased (Our Share) | GAAP Rent % Change | Cash Rent % Change | | :--- | :--- | :--- | :--- | | **New York Office** | 2,099,000 | 10.7% | 7.7% | | **New York Retail** | 66,000 | 21.8% | 8.7% | | **THE MART** | 210,000 | (4.7)% | (7.1)% | | **555 California Street** | 155,000 | 19.8% | 3.1% | Leasing Activity - Three Months Ended June 30, 2025 | Segment | Sq. Ft. Leased (Our Share) | GAAP Rent % Change | Cash Rent % Change | | :--- | :--- | :--- | :--- | | **New York Office** | 1,414,000 | 11.8% | 8.7% | | **New York Retail** | 48,000 | 7.9% | 0.3% | | **THE MART** | 127,000 | (4.4)% | (3.7)% | - Leasing statistics, other than total square feet leased, exclude the impact of the 1,076,000 square foot master lease to NYU at 770 Broadway[45](index=45&type=chunk)[48](index=48&type=chunk) [Lease Expirations](index=16&type=section&id=Lease%20Expirations) As of June 30, 2025, the company faces a manageable near-term lease expiration schedule. For the remainder of 2025, 2.0% of total square footage is set to expire. The most significant expiration years are 2027 and 2028, with 8.4% and 9.4% of total square footage expiring, respectively. The New York Office portfolio has notable expirations in 2027 (1.35M sq. ft.) and 2029 (1.14M sq. ft.) Our Share of Square Feet of Expiring Leases (% of Total) | Year | % of Total Expiring | | :--- | :--- | | **2025 (Remaining)** | 2.0% | | **2026** | 6.5% | | **2027** | 8.4% | | **2028** | 9.4% | | **2029** | 7.6% | | **2030** | 5.3% | - The New York Office portfolio has **1.35 million sq. ft.** expiring in 2027 and **1.01 million sq. ft.** expiring in 2028, representing **9.0%** and **6.8%** of its annualized escalated rent, respectively[57](index=57&type=chunk) - THE MART has a significant lease expiration in 2028, with **713,000 sq. ft.** (**24.5%** of its annualized rent) scheduled to expire[60](index=60&type=chunk) [Capital Expenditures and Re/Development](index=19&type=section&id=CAPITAL%20EXPENDITURES%20AND%20RE%2FDEVELOPMENT) The company incurred substantial capital expenditures for recurring items and development projects, with active redevelopments in the PENN District and significant future growth opportunities [Capital Expenditures](index=19&type=section&id=Capital%20Expenditures) For the six months ended June 30, 2025, Vornado incurred $198.5 million in total capital expenditures and leasing commissions. This included $157.9 million for recurring items such as tenant improvements and leasing commissions, and $40.6 million in non-recurring capital expenditures. Additionally, the company spent $82.1 million on development and redevelopment projects, with the largest portion ($43.7 million) allocated to PENN 2 Capital & Development Expenditures (Six Months Ended June 30, 2025) | Category | Total Company (in thousands) | | :--- | :--- | | **Recurring Capital Expenditures** | $157,885 | | Tenant improvements | $105,224 | | Leasing commissions | $22,612 | | **Non-recurring Capital Expenditures** | $40,634 | | **Total Capital Expenditures** | **$198,519** | | **Development/Redevelopment Expenditures** | **$82,064** | | PENN 2 | $43,672 | [Development/Redevelopment - Active Projects and Future Opportunities](index=20&type=section&id=DEVELOPMENT%2FREDEVELOPMENT%20-%20ACTIVE%20PROJECTS%20AND%20FUTURE%20OPPORTUNITIES) Vornado's active development pipeline is focused on the PENN District and Sunset Pier 94 Studios, with total remaining expenditures of $95.4 million at its share. The PENN 2 redevelopment is nearing completion with a projected 10.2% incremental cash yield. The company also holds a substantial pipeline of future opportunities, including the 2.1 million sq. ft. Hotel Pennsylvania site (PENN 15) and the 1.4 million sq. ft. 350 Park Avenue assemblage, which is subject to an option agreement with an affiliate of Kenneth C. Griffin Active Development Projects (at Vornado's share) | Project | Budget (in thousands) | Remaining Expenditures (in thousands) | Stabilization Year | Projected Incremental Cash Yield | | :--- | :--- | :--- | :--- | :--- | | **PENN 2** | $750,000 | $32,116 | 2026 | 10.2% | | **Sunset Pier 94 Studios (49.9%)** | $125,000 | $42,195 | 2026 | 10.3% | - Future development opportunities total over **4.3 million** zoning square feet, highlighted by the Hotel Pennsylvania site (PENN 15) and the 350 Park Avenue assemblage[65](index=65&type=chunk) - The 350 Park Avenue site is subject to an option agreement with an affiliate of Kenneth C. Griffin, which can either acquire a **60%** JV interest valuing the site at **$1.2 billion** or purchase it outright for **$1.4 billion**[67](index=67&type=chunk) [Unconsolidated Joint Ventures](index=21&type=section&id=UNCONSOLIDATED%20JOINT%20VENTURES) For the six months ended June 30, 2025, Vornado's share of net income from unconsolidated joint ventures was $113.6 million, a significant increase from $64.2 million in the prior year period. This was largely driven by a $76.2 million net gain on sale within the Fifth Avenue and Times Square JV. The company's share of NOI from these JVs was $133.3 million for the first half of 2025, slightly down from $138.7 million in 2024 [Unconsolidated Joint Ventures](index=21&type=section&id=UNCONSOLIDATED%20JOINT%20VENTURES) For the six months ended June 30, 2025, Vornado's share of net income from unconsolidated joint ventures was $113.6 million, a significant increase from $64.2 million in the prior year period. This was largely driven by a $76.2 million net gain on sale within the Fifth Avenue and Times Square JV. The company's share of NOI from these JVs was $133.3 million for the first half of 2025, slightly down from $138.7 million in 2024 Our Share of JV Performance (Six Months Ended June 30) | Joint Venture | Net Income (Loss) 2025 (in thousands) | Net Income (Loss) 2024 (in thousands) | NOI 2025 (in thousands) | NOI 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | **Fifth Avenue and Times Square JV** | $100,694 | $39,304 | $48,879 | $57,068 | | **280 Park Avenue** | ($8,257) | $15,426 | $17,251 | $15,592 | | **Alexander's** | $5,842 | $7,803 | $17,824 | $20,910 | | **Total** | **$113,648** | **$64,228** | **$133,338** | **$138,667** | - The increase in net income from the Fifth Avenue and Times Square JV was primarily due to a **$76.2 million** gain on the sale of a portion of the 666 Fifth Avenue condominium[72](index=72&type=chunk)[73](index=73&type=chunk) [Debt and Capitalization](index=23&type=section&id=DEBT%20AND%20CAPITALIZATION) The company maintains a diversified debt profile of $9.18 billion with a 4.75% weighted average interest rate, improved leverage, strong covenant compliance, and a staggered maturity schedule, actively utilizing hedging instruments to manage interest rate risk [Debt Analysis](index=23&type=section&id=Debt%20Analysis) As of June 30, 2025, Vornado's pro rata share of total debt was $9.18 billion with a weighted average interest rate of 4.75%. The company's Net Debt to EBITDAre, as adjusted, improved significantly to 7.2x from 8.6x at year-end 2024. The proportion of unsecured debt stood at 23% of the total debt Debt Summary (at pro rata share) | Metric | As of June 30, 2025 | | :--- | :--- | | **Total Debt** | $9,178,801,000 | | **Weighted Average Interest Rate** | 4.75% | | **Fixed Rate Debt** | $8,399,750,000 (4.60%) | | **Variable Rate Debt** | $779,051,000 (6.36%) | - The Net Debt to EBITDAre, as adjusted ratio improved to **7.2x** for the trailing twelve months ended June 30, 2025, down from **8.6x** for the period ended June 30, 2024[75](index=75&type=chunk) [Corporate Covenant Ratios and Credit Ratings](index=24&type=section&id=Corporate%20Covenant%20Ratios%20and%20Credit%20Ratings) As of June 30, 2025, the company was in compliance with all its corporate debt covenants, maintaining significant headroom. For its unsecured credit facilities, the total outstanding debt to total assets ratio was 33%, well below the required 60% threshold. The company's credit ratings are Ba1 from Moody's (Stable), BBB- from S&P (Negative), and BB+ from Fitch (Stable) Key Covenant Ratios (Unsecured Credit Facilities) | Covenant | Required | As of June 30, 2025 | | :--- | :--- | :--- | | **Total outstanding debt/total assets** | < 60% | 33% | | **Secured debt/total assets** | < 50% | 23% | | **Fixed charge coverage** | > 1.40 | 1.97 | | **Unencumbered assets/unsecured debt** | > 150% | 490% (Unsecured Notes) | Credit Ratings | Agency | Rating | Outlook | | :--- | :--- | :--- | | **Moody's** | Ba1 | Stable | | **S&P** | BBB- | Negative | | **Fitch** | BB+ | Stable | [Capital Structure](index=25&type=section&id=Capital%20Structure) As of June 30, 2025, Vornado's total market capitalization was approximately $18.4 billion. This was composed of $9.2 billion in debt (at share), $1.2 billion in perpetual preferred equity, and $8.0 billion in common equity Total Market Capitalization as of June 30, 2025 (in thousands) | Component | Amount | | :--- | :--- | | **Debt (at share)** | $9,178,801 | | **Perpetual Preferred Equity** | $1,223,035 | | **Common Equity** | $8,032,771 | | **Total Market Capitalization** | **$18,434,607** | [Debt Maturities](index=26&type=section&id=Debt%20Maturities) The company has a staggered debt maturity profile. At its pro rata share, $1.1 billion (11.6%) of debt matures in the remainder of 2025, followed by $1.7 billion (18.1%) in 2026 and $2.8 billion (30.9%) in 2027. The maturity schedule assumes the exercise of as-of-right extension options Debt Maturities at Share (in thousands) | Year | Amount Maturing | % of Total Debt | | :--- | :--- | :--- | | **2025 (Remaining)** | $1,069,066 | 11.6% | | **2026** | $1,660,963 | 18.1% | | **2027** | $2,832,116 | 30.9% | | **2028** | $1,944,095 | 21.2% | | **2029** | $365,628 | 4.0% | | **Thereafter** | $1,306,933 | 14.2% | - The 2025 maturities include the **$74.1 million** non-recourse mortgage loan on 606 Broadway, which matured in September 2024 and is in default[88](index=88&type=chunk) [Debt Detail (Consolidated and Unconsolidated)](index=27&type=section&id=Debt%20Detail%20%28Consolidated%20and%20Unconsolidated%29) The company's consolidated debt totals $7.1 billion, including major secured loans on properties like 555 California Street ($1.2B) and 1290 Avenue of the Americas ($950M), as well as $2.1 billion in unsecured debt. Unconsolidated debt totals $6.7 billion, with significant loans on properties such as 280 Park Avenue ($1.075B) and 650 Madison Avenue ($800M) - Total consolidated debt as of June 30, 2025, was **$7.12 billion**, comprising **$5.0 billion** in secured debt and **$2.13 billion** in unsecured debt[91](index=91&type=chunk) - Total unconsolidated debt (at 100%) was **$6.71 billion**, with Vornado's pro rata share amounting to **$2.74 billion**[95](index=95&type=chunk) [Hedging Instruments](index=29&type=section&id=Hedging%20Instruments) As of June 30, 2025, Vornado actively uses hedging instruments to manage interest rate risk. Of its $9.18 billion total debt at share, $5.27 billion is subject to interest rate swaps or a 1.00% SOFR cap, and an additional $342.7 million is subject to other interest rate caps. Approximately $3.13 billion is fixed-rate debt per loan agreements, leaving only $436.4 million (5% of total debt) of unhedged variable rate debt Debt Hedging Profile (at share) | Hedging Status | Amount (in thousands) | | :--- | :--- | | **Debt subject to interest rate swaps and 1.00% SOFR cap** | $5,272,500 | | **Variable rate debt subject to other interest rate caps** | $342,657 | | **Fixed rate debt per loan agreements** | $3,127,250 | | **Variable rate debt not subject to swaps or caps** | $436,394 | | **Total debt at share** | **$9,178,801** | [Property Statistics](index=30&type=section&id=PROPERTY%20STATISTICS) The company's portfolio comprises 27.2 million square feet, primarily in New York, with a diversified tenant base, varied occupancy rates across segments, and several key properties subject to ground leases [Top 30 Tenants](index=30&type=section&id=Top%2030%20Tenants) Vornado's tenant base is concentrated among several large corporations, primarily in the technology, media, and finance sectors. The top 30 tenants account for 46.6% of total annualized escalated rents. The top five tenants are Meta Platforms, IPG, Citadel, New York University, and Madison Square Garden, collectively representing 17.5% of total rents Top 5 Tenants by Annualized Escalated Rents | Tenant | % of Total Annualized Rents | | :--- | :--- | | **Meta Platforms, Inc.** | 4.6% | | **IPG and affiliates** | 3.7% | | **Citadel** | 3.5% | | **New York University** | 3.2% | | **Madison Square Garden & Affiliates** | 2.5% | [Square Footage](index=31&type=section&id=Square%20Footage) As of June 30, 2025, Vornado's portfolio at its share consists of 27.2 million square feet. The New York segment comprises the majority with 20.9 million square feet, while the Other segment, including THE MART and 555 California Street, accounts for 6.3 million square feet. The portfolio is primarily composed of office space (21.1 million sq. ft.) and retail (3.2 million sq. ft.) Portfolio Square Footage at Vornado's Share (in thousands) | Segment | Total Sq. Ft. | Office | Retail | | :--- | :--- | :--- | :--- | | **New York** | 20,857 | 17,521 | 2,200 | | **Other** | 6,316 | 3,568 | 1,007 | | **Total** | **27,173** | **21,089** | **3,207** | [Occupancy and Residential Statistics](index=32&type=section&id=Occupancy%20and%20Residential%20Statistics) As of June 30, 2025, occupancy in the New York portfolio was 85.2%, an increase from 83.5% in the prior quarter, which was impacted by PENN 2 being placed into service. THE MART's occupancy was stable at 78.2%, while 555 California Street's occupancy was 92.3%. The residential portfolio maintained high occupancy at 95.7% with an average monthly rent of $4,879 per unit Portfolio Occupancy Rates | Portfolio | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | **New York** | 85.2% | 83.5% | 88.3% | | **THE MART** | 78.2% | 78.2% | 76.9% | | **555 California Street** | 92.3% | 92.3% | 94.5% | - The decrease in New York occupancy from Q4 2024 was due to PENN 2 being placed into service during Q1 2025[107](index=107&type=chunk) [Ground Leases](index=33&type=section&id=Ground%20Leases) The company has several significant properties subject to ground leases, most notably PENN 1. The annual rent for the PENN 1 land was recently reset to $15 million, though this is under dispute by the ground lessor. Other major properties on ground leases include The Farley Building, 888 Seventh Avenue, and 330 West 34th Street - The PENN 1 land ground lease has a current annual rent of **$15.0 million**, with the next renewal option in 2073 and a final expiration in 2098, though the rent amount is currently being disputed in court by the ground lessor[109](index=109&type=chunk) [Property Table](index=34&type=section&id=Property%20Table) The report provides a detailed property-by-property breakdown for the New York and Other segments. For each property, it lists ownership percentage, occupancy, weighted average rent, total square footage, encumbrances, and major tenants. Key assets detailed include the PENN District portfolio, Park Avenue properties like 280 Park Avenue, THE MART in Chicago, and 555 California Street in San Francisco - The New York portfolio totals **26.3 million square feet** with an overall occupancy of **85.8%** and is encumbered by **$10.6 billion** in debt[124](index=124&type=chunk) - THE MART in Chicago is **3.7 million square feet** with **78.2%** occupancy and is unencumbered[130](index=130&type=chunk) - The 555 California Street complex in San Francisco is **1.8 million square feet**, **92.3%** occupied, and carries a **$1.2 billion** mortgage[130](index=130&type=chunk) [Executive Officers and Research Coverage](index=43&type=section&id=EXECUTIVE%20OFFICERS%20AND%20RESEARCH%20COVERAGE) This section lists the key corporate officers of Vornado Realty Trust, including Chairman and CEO Steven Roth and President and CFO Michael J. Franco. It also provides a list of investment banks and analysts that provide research coverage on the company, such as Bank of America, Evercore ISI, and Morgan Stanley [Appendix: Definitions and Non-GAAP Reconciliations](index=44&type=section&id=APPENDIX%3A%20DEFINITIONS%20AND%20NON-GAAP%20RECONCILIATIONS) This appendix provides essential definitions for non-GAAP financial measures and detailed reconciliations to their most directly comparable GAAP counterparts, aiding in comprehensive financial analysis [Definitions](index=45&type=section&id=Definitions) This section provides definitions for the non-GAAP financial measures used throughout the report. These include Net Operating Income (NOI) at Share, Same Store NOI, Funds From Operations (FFO), Funds Available For Distribution (FAD), Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (EBITDAre), and Net Debt to EBITDAre, as adjusted. The definitions clarify how each measure is calculated and why management believes it is useful for investors - Defines key non-GAAP metrics such as FFO (computed per NAREIT standards), FAD, NOI at Share, and EBITDAre, explaining their calculation and utility for performance assessment[143](index=143&type=chunk)[145](index=145&type=chunk)[146](index=146&type=chunk)[147](index=147&type=chunk) [Reconciliations](index=46&type=section&id=Reconciliations) This section contains detailed tables that reconcile the non-GAAP financial measures presented in the report to their most directly comparable GAAP measures. Key reconciliations include Net Income to FFO, FFO to FAD, Net Income to EBITDAre, and Net Income to NOI. It also provides reconciliations for same-store NOI calculations and consolidated debt - Provides detailed quantitative reconciliations for non-GAAP measures, including Net Income to FFO, FFO to FFO as adjusted, FFO to FAD, and Net Income to EBITDAre and NOI[150](index=150&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk)[155](index=155&type=chunk)
Vornado Announces Second Quarter 2025 Financial Results
Globenewswire· 2025-08-04 20:24
Financial Performance - Net income attributable to common shareholders for Q2 2025 was $743.82 million, or $3.70 per diluted share, a significant increase from $35.26 million, or $0.18 per diluted share, in Q2 2024, primarily due to an $803.25 million gain from the NYU master lease [1][3][10] - For the first half of 2025, net income attributable to common shareholders was $830.66 million, or $4.14 per diluted share, compared to $26.23 million, or $0.13 per diluted share, in the same period of 2024 [3][4] Funds from Operations (FFO) - FFO attributable to common shareholders plus assumed conversions for Q2 2025 was $120.93 million, or $0.60 per diluted share, down from $148.94 million, or $0.76 per diluted share, in Q2 2024 [2][4] - Adjusted FFO for Q2 2025 was $113.32 million, or $0.56 per diluted share, compared to $112.77 million, or $0.57 per diluted share, in Q2 2024 [5][7] Leasing and Occupancy - Total square feet leased in New York for Q2 2025 was 1,479,000, with an initial rent of $101.44 per square foot, reflecting an 11.8% increase from the prior year's straight-line rent [28] - Occupancy as of June 30, 2025, was 85.2% in New York, with office occupancy at 86.7% and retail at 67.7% [30] Dispositions and Gains - The company recognized a net gain of $76.16 million from the sale of a portion of the 666 Fifth Avenue condominium to UNIQLO [3][16] - A financial statement gain of $803.25 million was recorded from the NYU master lease transaction [11] Financing Activities - The company repaid $450 million in senior unsecured notes due January 2025 [21] - A $450 million financing of 1535 Broadway was completed, with a fixed interest rate of 6.90% [22] Development Projects - Active development projects include PENN 2, with a rentable area of 1,815,000 square feet and a projected cash yield of 10.2% [39] - The company has a 49.9% interest in the Sunset Pier 94 project, with a projected cash yield of 10.3% [39]
Vornado(VNO) - 2025 Q2 - Quarterly Report
2025-08-04 20:18
[PART I. Financial Information](index=5&type=section&id=PART%20I.%20Financial%20Information) This section presents the company's consolidated financial statements, management's analysis, market risk disclosures, and internal controls [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Vornado Realty Trust and Vornado Realty L.P. for the three and six months ended June 30, 2025, and 2024, including balance sheets, income statements, and cash flow statements with comprehensive notes [Financial Statements of Vornado Realty Trust](index=6&type=section&id=Financial%20Statements%20of%20Vornado%20Realty%20Trust) For the six months ended June 30, 2025, Vornado Realty Trust reported a significant increase in net income to $913.1 million, largely driven by an $803.2 million gain on a sales-type lease, while total assets and liabilities decreased, and net cash from operating activities surged to $1.08 billion Vornado Realty Trust - Key Financial Highlights (Six Months Ended June 30) | Metric (Amounts in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | **Total Revenues** | $903,016 | $886,641 | | **Net Income** | $913,051 | $33,826 | | **Net Income attributable to common shareholders** | $830,661 | $26,226 | | **Diluted EPS** | $4.14 | $0.13 | | **Net Cash from Operating Activities** | $1,078,946 | $226,164 | | **Net Cash from Investing Activities** | $525,155 | ($307,100) | | **Net Cash from Financing Activities** | ($1,190,422) | ($63,794) | Vornado Realty Trust - Balance Sheet Summary (Amounts in thousands) | Balance Sheet Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | $15,608,496 | $15,998,608 | | Real estate, net | $9,902,532 | $10,066,283 | | Cash and cash equivalents | $1,204,863 | $733,947 | | **Total Liabilities** | $8,594,438 | $9,826,739 | | Mortgages payable, net | $4,977,526 | $5,676,014 | | **Total Equity** | $6,263,961 | $5,337,211 | [Financial Statements of Vornado Realty L.P.](index=15&type=section&id=Financial%20Statements%20of%20Vornado%20Realty%20L.P.) Vornado Realty L.P.'s financial results mirror those of Vornado Realty Trust, with net income attributable to Class A unitholders reaching $903.4 million for the six months ended June 30, 2025, reflecting the consolidated nature of business operations Vornado Realty L.P. - Key Financial Highlights (Six Months Ended June 30) | Metric (Amounts in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | **Total Revenues** | $903,016 | $886,641 | | **Net Income** | $913,051 | $33,826 | | **Net Income attributable to Class A unitholders** | $903,356 | $28,583 | | **Diluted EPS (per Class A unit)** | $4.15 | $0.13 | | **Net Cash from Operating Activities** | $1,078,946 | $226,164 | [Notes to Consolidated Financial Statements](index=24&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on accounting policies and significant transactions, including a $803.2 million gain from the 770 Broadway master lease, various property dispositions, debt composition, and segment performance - On May 5, 2025, the company completed a 70-year master lease with New York University (NYU) for 1,076,000 sq. ft. at 770 Broadway, with NYU making a prepaid lease payment of **$935 million**, resulting in a gain on a sales-type lease of **$803.2 million**[84](index=84&type=chunk)[86](index=86&type=chunk) - The Fifth Avenue and Times Square JV, in which Vornado has a 51.5% interest, sold a portion of its 666 Fifth Avenue property to UNIQLO for **$350 million**, resulting in a financial statement gain of **$76.2 million** for Vornado, and the JV also completed a **$450 million** financing of 1535 Broadway[67](index=67&type=chunk)[69](index=69&type=chunk)[70](index=70&type=chunk) - During the first six months of 2025, the company sold two condominium units at 220 Central Park South for net proceeds of **$24.8 million**, realizing a net gain of **$13.7 million**, and also sold six residential condominium units on Canal Street for net proceeds of **$21.6 million**, resulting in a net gain of **$10.3 million**[88](index=88&type=chunk)[89](index=89&type=chunk) Debt Summary as of June 30, 2025 (Amounts in thousands) | Debt Category | Balance | Weighted Avg. Interest Rate | | :--- | :--- | :--- | | **Mortgages Payable** | | | | Fixed rate | $4,395,000 | 4.51% | | Variable rate | $603,943 | 6.65% | | **Unsecured Debt** | | | | Senior unsecured notes | $750,000 | 2.73% | | Unsecured term loan | $800,000 | 4.40% | | Unsecured revolving credit facilities | $575,000 | 3.84% | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the financial results for Q2 and H1 2025, highlighting a significant increase in net income due to the 770 Broadway master lease, while FFO per diluted share decreased for the quarter, alongside key transactions, leasing activity, and a strong liquidity position of $2.9 billion [Financial Results Summary](index=46&type=section&id=Financial%20Results%20Summary) For Q2 2025, net income attributable to common shareholders substantially increased to $743.8 million ($3.70/share) due to the 770 Broadway transaction, though FFO per diluted share decreased to $0.60 from $0.76, while six-month net income was $830.7 million ($4.14/share) with FFO per diluted share nearly flat at $1.27 Q2 Financial Results Comparison | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Income (common shareholders) | $743.8M | $35.3M | | Diluted EPS | $3.70 | $0.18 | | FFO (common shareholders) | $120.9M | $148.9M | | FFO per Diluted Share | $0.60 | $0.76 | Six-Month Financial Results Comparison | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Income (common shareholders) | $830.7M | $26.2M | | Diluted EPS | $4.14 | $0.13 | | FFO (common shareholders) | $256.0M | $253.1M | | FFO per Diluted Share | $1.27 | $1.29 | [Key Business Activities](index=48&type=section&id=Key%20Business%20Activities) The company executed several significant transactions in H1 2025, including the 70-year master lease of 770 Broadway to NYU for a **$935 million** prepaid payment, resulting in an **$803.2 million** gain, alongside multiple property dispositions and debt repayments - Completed a 70-year master lease at 770 Broadway with NYU, receiving a **$935 million** prepaid lease payment and recording an **$803.2 million** gain[210](index=210&type=chunk)[211](index=211&type=chunk) - The Fifth Avenue and Times Square JV sold a portion of 666 Fifth Avenue to UNIQLO for **$350 million**, with proceeds used to partially redeem Vornado's preferred equity[215](index=215&type=chunk) - Repaid **$450 million** of 3.50% senior unsecured notes upon their maturity on January 15, 2025[220](index=220&type=chunk) - A joint venture completed a **$675 million** refinancing of Independence Plaza, a 1,328-unit residential complex, with the new loan bearing a fixed rate of **5.84%** and maturing in June 2030[222](index=222&type=chunk) [Leasing Activity and Occupancy](index=50&type=section&id=Leasing%20Activity%20and%20Occupancy) In Q2 2025, the company leased 1.48 million square feet of New York office space and 57,000 square feet of retail space, with GAAP and cash basis rents for second-generation relet office space increasing by 11.8% and 8.7% respectively, resulting in overall portfolio occupancy of 85.2% Q2 2025 New York Leasing Activity (Second Generation Relet Space) | Metric | Office | Retail | | :--- | :--- | :--- | | Square Feet Leased | 240,000 | 44,000 | | GAAP Rent % Increase | 11.8% | 7.9% | | Cash Rent % Increase | 8.7% | 0.3% | Portfolio Occupancy as of June 30, 2025 | Segment | Occupancy % | | :--- | :--- | | New York - Office | 86.7% | | New York - Retail | 67.7% | | THE MART | 78.2% | | 555 California Street | 92.3% | | **Total Portfolio (Our Share)** | **85.2%** | [Liquidity and Capital Resources](index=64&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, Vornado maintained **$2.9 billion** of liquidity, comprising **$1.4 billion** in cash and **$1.5 billion** available under revolving credit facilities, with significant cash flow from operations primarily driven by the NYU prepaid lease payment and ongoing development projects - The company has **$2.9 billion** of liquidity as of June 30, 2025, comprising **$1.4 billion** in cash and **$1.5 billion** available on its revolving credit facilities[292](index=292&type=chunk) - Net cash from operating activities increased by **$852.8 million** for the six months ended June 30, 2025, primarily due to the **$901.4 million** net prepaid lease payment from NYU[295](index=295&type=chunk)[296](index=296&type=chunk) - Net cash used in financing activities increased by **$1.13 billion**, driven by **$1.28 billion** in debt repayments, including the repayment of the **$700 million** mortgage on 770 Broadway and **$450 million** of senior unsecured notes[295](index=295&type=chunk)[298](index=298&type=chunk) - Key development projects include the PENN 2 redevelopment (estimated cost **$750 million**, **$718 million** spent) and the Sunset Pier 94 Studios JV (estimated cost **$350 million**)[300](index=300&type=chunk)[302](index=302&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=69&type=section&id=Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risk from interest rate fluctuations, with a hypothetical 1% increase in base interest rates estimated to decrease annual net income by approximately **$4.7 million**, a risk mitigated through derivative instruments like interest rate swaps and caps - A hypothetical **1%** increase in base interest rates would decrease Vornado's annual net income by an estimated **$4.7 million**, or **$0.02** per diluted share[323](index=323&type=chunk) Consolidated Debt Exposure as of June 30, 2025 (Amounts in thousands) | Debt Type | Balance | Weighted Avg. Interest Rate | | :--- | :--- | :--- | | Fixed Rate | $6,520,000 | 4.23% | | Variable Rate | $603,943 | 6.28% | | **Total** | **$7,123,943** | **4.40%** | - The company uses interest rate swaps and caps to manage interest rate risk, with significant hedging instruments in place for debt on properties like 555 California Street, the unsecured term loan, and the unsecured revolving credit facility as of June 30, 2025[330](index=330&type=chunk)[331](index=331&type=chunk) [Item 4. Controls and Procedures](index=72&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that as of June 30, 2025, the disclosure controls and procedures for both Vornado Realty Trust and Vornado Realty L.P. were effective, with no material changes to internal control over financial reporting occurring during the quarter - Management concluded that as of June 30, 2025, the disclosure controls and procedures for both Vornado Realty Trust and Vornado Realty L.P. were effective[335](index=335&type=chunk)[337](index=337&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls[336](index=336&type=chunk)[338](index=338&type=chunk) [PART II. Other Information](index=73&type=section&id=PART%20II.%20Other%20Information) This section details legal proceedings, risk factors, equity sales, and other relevant disclosures [Item 1. Legal Proceedings](index=73&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal actions arising in the ordinary course of business, which management does not expect to have a material adverse effect on its financial position or results of operations - The company states that ongoing legal actions from the ordinary course of business are not expected to have a material adverse effect on its financial condition[339](index=339&type=chunk) [Item 1A. Risk Factors](index=73&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the Risk Factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to the company's risk factors were reported for the period[340](index=340&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=73&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the quarter, Vornado Realty Trust issued 91,369 common shares to redeem Class A units of Vornado Realty L.P. under an exemption from registration, with no share repurchases made and **$170.9 million** remaining available under its authorized repurchase plan - Vornado Realty Trust issued **91,369** common shares in exchange for the redemption of Class A units of the Operating Partnership[341](index=341&type=chunk) - No shares were repurchased during the three months ended June 30, 2025, with **$170,857,000** remaining authorized for future repurchases as of quarter-end[342](index=342&type=chunk) [Item 5. Other Information](index=73&type=section&id=Item%205.%20Other%20Information) The company reported that none of its directors or officers adopted, terminated, or modified a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025 - No directors or officers adopted, terminated, or modified a Rule 10b5-1 trading arrangement during the second quarter of 2025[346](index=346&type=chunk)
Vornado Realty Trust Leases 203,000 SF to Verizon for New York Headquarters in THE PENN DISTRICT
Globenewswire· 2025-07-29 12:17
Core Insights - Verizon will relocate its New York headquarters to Vornado's PENN 2 office tower as part of a 19-year lease, occupying nearly 200,000 square feet of office space [2][3] - The PENN 2 building features modern amenities, including over 25,000 square feet of outdoor space and a flagship retail location for Verizon [3][4] - Vornado's PENN DISTRICT aims to create a vibrant corporate environment, integrating dynamic workspaces and employee-focused design [4][6] Company Overview - Vornado Realty Trust is a fully integrated real estate investment trust (REIT) with a focus on premier office and retail assets in New York City, Chicago, and San Francisco [10] - The company emphasizes sustainability, with 100% of its in-service office buildings LEED certified and over 95% certified LEED Gold or Platinum [10] Project Details - PENN 2 includes a modern curtain wall, a triple-height lobby, and 30,000 square feet of curated retail space, along with extensive outdoor green spaces [4][5] - The PENN DISTRICT campus, which includes PENN 1 and PENN 2, offers a total of 4.4 million square feet of premium office space and improved access to public transportation [6][8] - Tenants in the PENN DISTRICT have access to Vornado's WorkLife program, which includes a comprehensive amenity package featuring a wellness center and flexible workspaces [7]
X @Bloomberg
Bloomberg· 2025-07-28 21:28
Real Estate & Telecommunications - Verizon to establish new Manhattan headquarters at Vornado Realty Trust's Penn 2 [1] - Penn 2 is a redeveloped office tower near Penn Station [1]
Alexander's Announces Second Quarter Earnings Release Date and Vornado Realty Trust Quarterly Conference Call
Globenewswire· 2025-07-22 14:52
Core Points - Alexander's, Inc. will file its quarterly report on Form 10-Q for the quarter ended June 30, 2025, and will issue its second quarter earnings release on August 4, 2025, before the market opens [1] - Vornado Realty Trust, which manages Alexander's operations, will host a quarterly earnings conference call on August 5, 2025, at 10:00 a.m. ET, where information regarding Alexander's may be discussed [2] - The conference call will be accessible via phone and a live webcast will be available on Vornado's website, with playback options following the call [3] Company Overview - Alexander's, Inc. is a real estate investment trust (REIT) that owns five properties in New York City [3]
Vornado Boosts Strength With Refinancing of PENN 11 Building
ZACKS· 2025-07-17 17:06
Core Insights - Vornado Realty Trust, Inc. (VNO) has successfully completed a refinancing of $450 million for its Manhattan office building, PENN 11, which spans 1.2 million square feet [1][8] Group 1: Refinancing Details - The new five-year interest-only loan has a fixed interest rate of 6.35% and is set to mature in August 2030 [2][8] - Vornado repaid $50 million of its previous $500 million loan, which had an interest rate of SOFR plus 2.06% (swapped to a fixed rate of 6.28%) and was due to mature in October 2025 [2][8] Group 2: Financial Implications - This refinancing enhances Vornado's financial flexibility, improving its maturity profile and providing greater liquidity for daily operations [3][8] - As of March 31, 2025, Vornado had $2.3 billion in liquidity, which includes $807 million in cash and cash equivalents, and $1.5 billion available under its $2.2 billion revolving credit facilities [4] Group 3: Market Performance - Over the past three months, Vornado's shares have increased by 13.8%, outperforming the industry growth of 3.2% [5]